So Why Is Wells Fargo Still In Business? Story of a Broken Culture.

Source: Pruhter derivative work: Xnatedawgx CC BY-SA 3.0

The latest in the Wells Fargo scandals has me asking, why is America’s third largest bank ($1.95 trillion) still in business? And is its present CEO, Tim Sloan, the best person to head up the sanctions and changes the Federal Reserve mandated? The Fed has yet to remove the bruising penalties it imposed on Wells Fargo in February for “widespread consumer abuses,” saying it won’t lift the asset cap until it’s satisfied Wells Fargo has cleaned up its act.

Mr. Sloan’s capacity has been questioned by Senator Elizabeth Warren who called for Sloan’s resignation a year ago. John Taylor, The CEO of the National Community Reinvestment Coalition, has also questioned whether Mr. Sloan is the right person for the job. Can Mr. Sloan, an insider with 31 years of working within the present culture, be objective enough to make the changes needed to turn the bank around?

Wells Fargo’s latest scandal, that dozens of employees at its investment bank, Wells Fargo Securities, have doctored “after hours dinner receipts and charged them back to the company” doesn’t build confidence that the bank has “cleaned up its act!”

The company has fired and suspended at least twelve so far and is investigating dozens more.Apparently the individuals, who range from analysts to a managing director, allegedly altered time stamps on their dinner receipts so they would be eligible for reimbursement. In a statement to FOX Business, a spokesperson for the bank said: “We became aware that certain Wells Fargo Securities team members were not complying with after-hours meal reimbursement policies…We took action to address the issues and we continue to investigate the matter.”

Of all things, some customers were charged for pet insurance and other products they didn’t fully understand. The Bank has also had to set aside $285 million to refund foreign-exchange and wealth-management clients for incorrect pricing and fees.

Very sorry – and your house is mistakenly foreclosed on!That’s all they can say!

The continual customer abuses are appalling. All of this by the way from a bank that claims it has the best interests of its customers as its first priority. As they publicly state,“The Vision, Values & Goals of Wells Fargo details the enduring principles that guide all Wells Fargo team members in the work they do every day — in serving customers and helping each other.”

In a message to customers, CEO and President Tim Sloan has said, “Wells Fargo still has work to do. Yet we are a better bank today than we were a year ago, and we become better and stronger each day. Thank you for doing business with Wells Fargo. Our top priority remains earning your trust each and every day.”Employees who are entrusted to manage customers’ income and who lie on their expense reports do not earn trust!

William Klepper, a management professor at Columbia Business School who conducted a case study on the crisis at Wells Fargo said, “Wells Fargo is still trying to sweep up broken glass — but they’re finding it all over the place… The problems are far more pervasive than in just retail banking.”

Based on everything we’ve seen to date, the problems appear to be systemic, indicatinga broken culture. A recent Harvard Business Review article defines culture as“…the tacit social order of an organization: It shapes attitudes and behaviors in wide-ranging and durable ways. Cultural norms define what is encouraged, discouraged, accepted or rejected within a group. When properly aligned with personal values, drives and needs, culture can unleash tremendous amounts of energy toward a shared purpose and foster an organization’s capacity to thrive.” (B. Groysberg, J. Lee, J. Price and J. Yo-Jud Cheng: HBR, January 2018)

A company’s culture goes way beyond the bank’s splashy marketing campaign claiming one is cleaning up its act or fancy slogans and posters. Public ads making promises it is not keeping do not earn trust and do not show it has a culture of integrity and respect for employees and customers.

Even if CEO Tim Sloan vowed to uncover mistakes of the past the egregiousness of the “mistakes,” misdeeds, fraudulent behaviors, lying and stealing that has been uncovered at Wells Fargo means a new culture must be established.

Leading organizations worldwide share several key attributes which have earned them the trust and loyalty of both employees and customers. Trust is the cornerstone of the organization’s culture from the top down throughout the organization.

It’s about way more than just uncovering mistakes. It’s taking action to assure they cannot happen again. Wells Fargo needs to dramatically replace a culture that has pervaded the organization and has made acceptable a culture that “encourages” such pervasive abuses toward employees as well as customers. It may even mean replacing the entire senior team.

In the Leadership Challenge, first published in 1987, the authors of this seminal work, James M. Kouzes and Barry Z, Posner spoke to a survey they conducted in their research for the book. They asked over 100,000 respondents what characteristics they most admired in leaders.

Consistently across the board, in many different countries with vastly different cultures, the answer stated was “… first and foremost that people want a leader (leaders) who are honest.”

It is the leaders of an organization who set the tone, who establish the culture, who get buy-in or not to the organization’s values and beliefs. Wells Fargo admits rebuilding trust with their team members, customers, communities, shareholders and regulators remain their top priority.

The overhaul the bank needs to make is not just uncovering mistakes. It’s setting a cornerstone of this is what we expect and it’s a brand new culture. Do they have the capacity to truly implement needed change with management steeped in the old culture?

Ethics on your mind? Subscribe to my ezine to get my latest article delivered right to your inbox. Click Here to Subscribe

Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

What People Are Saying About Richard M. Bowen

"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst."

~ William D. Cohan, NY Times Best Selling Author

2017-06-30T10:08:59+00:00

"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author

http://www.richardmbowen.com/testimonials/2556/

"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger."

~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual

2015-02-13T19:51:19+00:00

"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger." ~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual

http://www.richardmbowen.com/testimonials/711/

"Richard Bowen, you are a star and a hero."

~ Ben Stein, Economist and Political Commentator

2015-02-13T19:50:26+00:00

"Richard Bowen, you are a star and a hero." ~ Ben Stein, Economist and Political Commentator

http://www.richardmbowen.com/testimonials/712/

"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving. The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership."

"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving. The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International

http://www.richardmbowen.com/testimonials/532/

"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years."

~ Dennis McCuistion, Host of the McCuistion TV program

2014-12-28T19:48:06+00:00

"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program

http://www.richardmbowen.com/testimonials/533/

"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!"

~ Betty Garrett, Garrett Speakers International

2014-12-28T19:47:50+00:00

"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!" ~ Betty Garrett, Garrett Speakers International

http://www.richardmbowen.com/testimonials/531/

"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences."

~ Fred Timmons, Chairman of The Texas Society of CPA's

2014-12-28T19:47:22+00:00

"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences." ~ Fred Timmons, Chairman of The Texas Society of CPA's